Friday, February 15, 2013

Lately there has been some discussion that PennDOT may cease to fund the Pennsylvanian come October and 100% state support requirements. Running once a day between New York and Pittsburgh, it's the only train serving Pennsylvania west of Harrisburg and at least half of its 200,000 annual riders come from this area. That PennDOT may choose not to fund the Pennsylvanian is rather befuddling given that the subsidy would only be in the realm of $5-6 million, but Pennsylvania was hard hit by gerrymandering and that could be a major contributing cause. Whatever the reason may be, Pennsylvania and other states should look at adopting one of California's best practices and add connecting bus service in order to improve ridership and revenue on short distance corridor routes.

As RailPAC is fond of noting, and Caltrans explicitly referred to in their recent report on the Surfliner Express, the number of city pairs is critical for determining and supporting ridership. Saving a few minutes of schedule time by cutting a few cities has not only failed to meet with success, either in California or elsewhere in the country, but generally resulted in plummeting ridership. Adding city pairs, generally through lengthening the route, has rather the opposite effect, boosting ridership and with it revenue. Of course, lengthening the route can be a rather expensive endeavor and without also speeding up travel, revenue and ridership gains won't necessarily counter the increased expense of running the train further. However, adding additional potential city pairs via painless transfers is a solution which California has adopted with great success with its Thruway system and which ought to be adopted by PennDOT and other agencies.

For all intents and purposes, California's Thruway system is the Amtrak Thruway system, representing not only the densest network of bus schedules, but, unsurprisingly, the vast majority of ridership. Indeed, several of its routes have greater ridership than many of Amtrak's short distance corridors. In particular, the Los Angeles-Bakersfield bus bridge between the Pacific Surfliners and SanJoaquins has greater ridership than the Pennsylvanian (212,000 riders vs 207,422 riders in FY11). One in six Amtrak California riders uses the Thruway system and, according to the draft 2013 California State Rail Plan, "Almost 50 percent of San Joaquin route passengers use a bus on at least one end of their trip." (page 217).

Of course, if the goal is to reduce potential subsidy levels, this is all rather moot if the increased ridership and bus services would simply increase the level of subsidy. However, I do not believe that this is a realistic fear. With rare exceptions, every Thruway passenger is a new passenger. Since the marginal cost of an additional passenger is effectively null, we can consider the entire revenue gained by the addition of that passenger to count against the cost of operating the connecting service. In the particular case of the Pennsylvanian, the average passenger contributes $43.78 in ticket revenue, rising to $46.70 if we include food and beverage revenues (based on FY2012 figures). With only a single train per day, a single bus should be able to service both directions for a particular route without much trouble. Examining BusRates.com for Pittsburgh, Akron/Canton, Cleveland, and Altoona, a daily rate of $900-1000 would appear to be the typical rate. In order to break even with such a price, any individual route would need to average 21-23 daily riders or an annual total of 8,400; less if one adds a small amount to the cost of the ticket for the bus bridge. Any ridership in excess of this is simply profit from the viewpoint of the train operator. While Amtrak or PennDOT could probably bring this rate down with the incentives of a fixed long term contract, it should suffice to prove the point.

Why look at Ohio if the Pennsylvanian receives no funding, taxes, or other such incentive to provide service to Ohioans? For the very simple reason that anyone who is traveling to or from Ohio and does so with the Pennsylvanian makes money for PennDOT. Certainly if the lines are not at least revenue neutral, they shouldn't be continued. If, however, they operate with net positive revenue, there is absolutely no reason for PennDOT not to operate cross-border bus operations just as it does cross-border train operations with the Pennsylvanian and Keystone Service.

As a final benefit, the ridership from connecting bus services allows for simple assessment of where train extensions would find ready demand as well as providing a significant amount of political support for such extensions. It is one thing to suggest that, for example, the San Joaquins ought to be extended an additional 160 miles north to Redding, California. It is quite another to suggest so and add "and we already have 140,210 annual riders on the bus transfer" to the mix (California State Rail Plan, pages 243-244) as well as have those riders petitioning their legislative representatives for that extension.

I am absolutely astounded at the ridership and revenue gains for the Coast Starlight and am at a loss to explain them. There wasn't a disruption last January that would explain it and in fact the Starlight had gain of 7.6% in ridership last January, though with a 2.2% drop in revenue.

Sunday, February 10, 2013

Randal O'Toole, bus fetishizing anti-rail author extraordinaire, has penned a new missive against high speed rail for the Cato Institute, taking the recent map gone viral by Alfred Twu of a national high speed rail network as an opportunity to slam on high speed rail in general. Now, I, like many others, think that that map is completely and utterly absurd, an absolute travesty, and evidence that anyone who supports that map has no business trying to advocate for high speed rail; it's simply that silly. However, O'Toole is not content with simply bashing a silly map, but feels the need to extend this into the realm of high speed rail in its entirety.

Twu’s map violates conventional wisdom among high-speed rail aficionados, which holds that trains are most competitive in 100- to 600-mile markets, not 2,000- to 3,000-miles. By “most competitive,” of course, they mean “able to capture 5 or 6 percent of the market,” which–when all modes are counted–is all that Amtrak has in the Boston-to-Washington corridor.

This, quite frankly, is an entirely specious argument without any merit whatsoever. That Amtrak only has 5-6% of the market is an irrelevancy; it doesn't have the current capacity to do more than that as it stands. Look at the current Acela, the abominably slow train with a lower service speed than All Aboard Florida is planning for their service. It has a maximum capacity of 304 seats and currently runs at capacity, allowing Amtrak to rake in a rather substantial amount of revenue from these trains. Suppose it were replaced instead with what is a common sight in France, a pair of Duplex train sets coupled together for one 400m train with 1,090 seats. It would be an extremely odd assertion indeed to suggest that, between current unsatisfied demand and Amtrak revenue maximizing with ticket prices, market capture would remain unchanged.

Furthermore, this ignores the examples given by the extant high speed services in Europe. Even prior to the introduction of high speed rail, SNCF had a 40% market-share between Paris-Lyons and Renfe 16% between Madrid and Seville. Within three years of introducing high speed rail, these had climbed to 72% and 51% respectively (source, page 601), in large part from induced traffic, but also including a significant amount of diverted traffic. Certainly Europe has higher driving costs than America, but it is not sufficiently so as to invalidate such examples for America. In the Northeast, which is home to a significant number of toll roads and bridges, the marginal cost of driving is sufficiently high as to be comparable with European driving, further eroding the value of such a distinction.

But dreaming about faster trains does little to change the fact that the fastest trains in the world are only about half as fast as jet aircraft, nor the fact that more Americans live and work within a few minutes of airports than downtown train stations. Anyone who is really serious about speeding travel would find ways to speed airport security, which would cost a lot less and do a lot more to help a lot more travelers than building multi-billion-dollar rail lines.

Those jet aircraft themselves are only half as fast as the Concorde was, indicating that sheer speed is not the sum total of demand. Further, while airports are far more flexible in the destinations that they can serve, they do not necessarily serve all markets, or do so with schedules and prices that are grossly inconvenient. It's all very well and good to have a 90 minute flight, but if it requires me to drive for an hour to find an affordable airport for the trip, as is the case for many regional trips, the higher cruise speed of the airplane is lost in the background of overall trip time. Furthermore, while I have no objection to speeding up airport security, and would dearly love to wear my shoes the entire time, my own experience (which appears to be the norm) is that the wait time is only a few minutes. Indeed, checking in luggage or simply walking to the gate generally take me longer than TSA.

O'Toole ends his piece with the usual rigamorale about how "[s]ince high-speed passenger trains are not commercially viable, the only way to have them is for the government to build them." However, we have previously dispelled the myth in so far as regards operational surpluses and that is a terribly odd position to hold when JR Central is constructing a high speed maglev system without government funding. Then again, suggesting that New York City would be better off replacing subways with underground battery powered buses is a famous terribly odd idea of his as well.

Thursday, February 7, 2013

This is entirely unsurprising. In its first year, it had a 28% drop in ridership with flat revenue but following that up in 2012 with 30% and 25% drops. Adjusted for performance of the Surfliner in general, it averaged a 30% ridership decline the first year with an 11% reduction in revenue and further drops of 25% and 27% respectively for the next year. An additional point is made that this train was one of only three trains with train-bus-train connections to the San Joaquin and the only one which allowed for an afternoon arrival in Fresno and arriving in San Francisco before 8pm. The loss of this train as a possible connection for many stations likely led to a loss of ridership and revenue on the San Joaquins as well, though it would be hard to tease out the impact of such given the phenomenal growth that the San Joaquins have experienced over the past years.

I will remain eternally puzzled as to why a slot with consistently poor on-time performance beforehand was chosen for this experiment.

Now, admittedly, I'm doubtful about these claims; I would expect about a hundred million dollars and a year in order to install positive train control along the route, but it is possible that the private partner would be sufficiently contributing that the public contribution would be only $50 million. With that said, I believe that this proposal, All Aboard Florida, and Chicago to Omaha all share a common element which represents the future of American passenger rail expansion: The use of Class II or III railroad tracks.

All Aboard Florida is, of course, using their own rails as part of the Florida East Coast conglomerate. More northerly, the selected Chicago to Omaha route utilizes the Iowa Interstate Railroad (with a BNSF connection in Illinois for the run into Chicago). Looking at a rail map of Oklahoma, this proposal would use Stillwater Central Railroad for most of its route (this track is actually owned by the State of Oklahoma and leased to SWCR) and either BNSF or the Trans-Sapulpa Union Railway, another short line, into Tulsa itself.

Why are these rail lines the future of expanded American passenger rail service? In brief, cost and capacity. Class I rail lines running between American cities tend to be utilized at very high levels of capacities, much of which is through freight. As a result, the addition of even a few passenger trains, each of which is equivalent to multiple freight trains in terms of rail capacity utilization, can add a significant strain to freight operations. As a result, expanding rail service frequently involves spending significant sums in order to double or triple track lines and add additional sidings and crossovers in order to add sufficient capacity.

This is often not the case with short line and regional railroads which operate with significantly less traffic and a higher percentage of local traffic. While the Florida East Coast Railway is rather unique among all American railroads in operating with automatic train control and cab signals, the Iowa Interstate Railroad is rather more typical in not having any signaling at all and trains proceeding under track warrants. In such a situation, the simple and cheap addition of signaling, required for passenger train speeds in excess of 59 mph, can result in significant improvements to capacity, allowing for increased freight service as well as the passenger service. A single tracked line operating without signals or only track warrants will have its capacity nearly doubled, from 16 daily trains to 30 daily trains, simply from upgrading the signal systems to a centralized traffic control system (page 4-7). As a result, short-line railroads realize significant value and increased freight capacity from the addition of passenger rail funded improvements and should prove far more amenable towards passenger rail service than their Class I brethren have shown themselves.

This is not to say that there will not still be new operations involving Class I railroads or greenfield projects such as California's high speed rail project. Rather, it is that we can expect either a disproportionate or even predominant number of those passenger rail projects which are successfully built and introduced into service will be utilizing Class II and III trackage to a significant degree.

Friday, February 1, 2013

With 95% on time rate (no more than 9 minutes behind schedule at Los Angeles), the Pacific Surfliner Express now has four months in a row with OTP above 85%. It's amazing the difference it can make to stop always using Amfleet equipment with stations and schedules designed for California's bilevel cars. Unfortunately for the Express, this has not translated into a ridership gain, which has been fairly flat since December 2011 with only 161 passengers per train in December of 2012. Ridership is back up again for the route over all however and with it double digit revenue increases. Most impressive are the national gains in revenue and ridership. Nationally Amtrak was flat for December 2011 against December 2010, so this is a true major increase rather than a mild increase made seemingly greater by losses the previous year.